BUSINESS STANDARDS
is the quarterly magazine of BSI Group, highlighting the vital role that standards play in today's business environment. Regular features include interviews with leading business figures, as well as news on the latest developments in management systems and standards.

Business Standards > Articles

Responsible behaviour

28 May 2008
Topics: CSR, Social accountability, SA8000

At every turn it seems that large corporations are falling over themselves to demonstrate they're being socially responsible. M&S is going carbon neutral, Unilever is partnering with the World Food Programme to relieve child hunger and Sainsbury's, among other initiatives, has so far donated £52 million of equipment to help children stay active.

For their trouble, all three of these UK organizations have found a place on the 2008 Global 100 Most Sustainable Corporations in the World list: a list important enough to be announced annually at the Davos World Economic Forum.

Are we witnessing a genuine sea change in the way business operates, or as a soon to be published report from BSI (Taking CSR Seriously) puts it: "Most large organizations have embraced the rhetoric of Corporate Social Responsibility, but have they actually changed their behaviour as a result?"

Certainly, there's no lack of communication or activity. Over 95 per cent of UK FTSE 100 companies are publishing annual sustainability or corporate responsibility reports and in February, IBM surveyed 250 business leaders and found that 68 per cent of them claim to be currently engaged in CSR practices. Even the café in Coronation Street is working on its carbon footprint.

The 1,254 senior managers who participated in a recent Economist Intelligence Unit (EIU) CSR survey, meanwhile, are working on the environment (especially on reducing greenhouse gases), improving human-rights performance in the supply chain, and developing innovative products and services to address social environmental problems.

As for those surveyed by BSI for Taking CSR Seriously, they're taking action on everything from "delivering social change on domestic violence" to "replacing waste paper bins with recycling facilities at the corporate HQ".

What's more, the IBM report identifies a "growth curve" in the progress that companies make in CSR implementation: first, merely meeting legal requirements, then progressing to cost savings from higher efficiency in operations, and ending with the opening of new markets or product innovations as a result of CSR.

But there is a sting in the tail: only 16 per cent of those surveyed by IBM said that they "fully engage and collaborate with customers" on CSR activities. And these findings broadly bear out what the BSI survey also uncovered: that the majority of companies aren't yet fully fledged adopters of CSR. Just one measure of how seriously organizations take it is the personnel resource they put into it. Of the companies BSI surveyed, only one-third of respondents had CSR as their main area of responsibility. For the rest, CSR activity had to get in the queue with a range of other responsibilities.

How seriously a company takes CSR can also be gauged to some extent by looking at why CSR is implemented in the first place. For the majority in the BSI survey, legal requirements and concern about reputational risk ranked more highly than a "genuine tradition of altruism and social responsibility", while surprisingly pressure from shareholders, employees and the job market sit at the bottom of the list.

Corporate Watch, a self-proclaimed anti-corporate research group, cites the reasons for adopting CSR in its recent report as being: to bolster public image, to avoid regulation, to gain legitimacy and access to markets and decision-makers, and to shift the ground towards privatization of public functions (none of them necessarily bad things).

Standards for CSR

No matter why companies choose to put CSR into practice, how to actually do it in an integrated way remains an issue. One barrier is the lack of universally agreed systems, processes and terminology.

Under this heading, CSR-specific standards do, of course, exist. These include the Global Reporting Initiative, the AA1000 Assurance Standard, BS 8900 Guidance for managing sustainable development, SA8000 on social accountability, the UN Global Compact as well as the OECD guidance on bribery and corruption.

Nineteen per cent of BSI's respondents had wholly adopted some of these, yet for each of these standards, at least 40 per cent were unaware of their existence. Just over a quarter of the companies surveyed were implementing an in-house standard. There is also clearly a role for embedding CSR into compliance with management systems standards like ISO 9001 and ISO 14001, but very few organizations in the BSI survey had actually done so.

Hope for a universal standard might lie in the yet to be published ISO 26000 Guidance for social responsibility.

In the meantime, AccountAbility's AA1000AS, which assures existing sustainability and corporate responsibility reports, remains the most popular CSR standard. BSI Management Systems works with AccountAbility to assure these reports through its new Sustainability Report Assurance (SRA) Scheme.

When all is said and done, and within the existing frameworks, are UK organizations taking CSR seriously? In the BSI survey, nearly half of respondents reported that they do take it seriously, but don't deal with it in a formal way. A further 10 per cent produce public reports, but don't have any other dedicated CSR projects.

Of the remainder, 18 per cent sit at the top end of the maturity table and report that CSR is a formal consideration in everything they do and affects every important business decision.

These results suggest that the development of CSR practice has entered a phase in which a minority of organizations are demonstrating a genuine determination to embed CSR in all their activities, while for others it remains a bolt-on activity to enhance reputation.

That said, there's more evidence to ponder: the EIU found companies that ranked social and environmental goals as high priorities also showed the most impressive stock price performance over the past three years. If most UK organizations aren't taking CSR seriously yet, they may well be doing so soon.

For more information on BSI's SRA Scheme, telephone Mark Fraser on +44 (0)20 8996 7522 or email mark.fraser@bsigroup.com.

Business Standards © 2008. Editorial produced by Caspian Publishing in association with the British Standards Institution. Editorial opinions expressed on are not necessarily those of BSI Group or Caspian Publishing. Neither Caspian Publishing nor BSI Group accept responsibility for advertising or editorial content, nor for that appearing on linked third-party websites. Reproduction in whole or in part is forbidden without written permission from BSI Group or Caspian Publishing.

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